Fertility and its consequence on family labor supply and Income

Jungho Kim, Vienna Institute of Demography
Arnstein Aassve, University of Essex

While a large body of literature focuses on how the fertility affects female labor market participation, there are relatively few studies that examine the effect of fertility on male labor market participation. Even if the burden of child care falls mainly on women, an exogenous increase in fertility is likely to change the optimal allocation of time, therefore, the labor supply decision of both female and male in a household. This paper examines how an exogenous increase in fertility affects labor market participation of a woman and a man in a household. The finding is that women reduce their working hours in response to the higher fecundity. On the other hand, the higher fecundity does not lead to men's increasing or decreasing their working hours. Further, there is found no evidence that fertility affects female or male earnings. The results suggest a few characteristics of Indonesian labor market and household structure.